Financial Literacy among Undergraduate Students: Empirical Evidence from Ghana

Abstract

This study investigates the level of financial literacy among undergraduate university students in the northern region of Ghana. Specifically, the study examined whether gender, age, programme of study, study years, parent’s income level and student’s financial status, are related to financial literacy. An adapted version of the OECD/INFE (2015) toolkit for measuring financial was used to collect data on the level of financial literacy for a stratified random sample of 342 undergraduate students at the Nyankpala and Tamale campuses of the University for Development Studies (UDS) in Ghana. Logistic regression and Chi-Square statistical procedures were used to analyse the data using STATA version 14 of statistical software. As expected students’ experience in handling money (through managing incomes from working) positively influences their financial literacy as such experience in handling monies would require them to be knowledgeable about financial management matters such as budgeting, investment, interest rate, among others. Saving out of pocket incomes of the students remains a very significant consideration in the management of their personal finances. Being financially literate appears not to have a (statistically) significant influence on savings propensities of the students. On the other hand our finding that as student’s monthly pocket money increases their propensity to save will also be high is in accordance with the theory of savings behaviour which posits that saving is a positive function of disposable income.

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